The risk-free rate is usually approximated by interest rates on U.S. government debt, because the US government:
A. backs all loans secured with that rate.
B. sets all policy concerning interest rates.
C. is considered extremely unlikely to default.
D. will never default on a loan that it makes.
Answer: C
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According to classical economists, government intervention is:
a. necessary to maintain a stable price level in the long run. b. necessary to maintain a stable price level in the short run. c. necessary to maintain full employment in the long run. d. necessary to maintain full employment in the short run. e. not necessary to maintain full employment.
Which of the following events would increase the four-firm concentration ratio in a milk industry with six firms?
A. The two largest milk producers merge. B. The largest milk producer buys an ice cream-making plant. C. The largest milk producer lures customers away from the second largest producer. D. The four largest milk producers collusively fix prices.